Kelsey Sheehy is a senior writer and NerdWallet authority on small business. She started at NerdWallet in 2015 and spent six years as a personal finance writer and spokesperson before switching gears to cover the financial decisions and challenges faced by small-business owners. Kelsey’s work has appeared in The New York Times, The Washington Post, Nasdaq and MarketWatch, among other publications. Kelsey has appeared on the "Today" show, NBC News and ABC’s "World News Tonight" and has been quoted by the Los Angeles Times, CNBC, American Banker, NPR and Vice, among other publications. Prior to joining NerdWallet, Kelsey covered college (and how to pay for it) for U.S. News & World Report. She is based in Washington, D.C.
Assigning Editor Sally Lauckner
Assigning Editor | Small business
Sally Lauckner is an editor on NerdWallet's small-business team. She has over 15 years of experience in print and online journalism. Before joining NerdWallet in 2020, Sally was the editorial director at Fundera, where she built and led a team focused on small-business content and specializing in business financing. Her prior experience includes two years as a senior editor at SmartAsset, where she edited a wide range of personal finance content, and five years at the AOL Huffington Post Media Group, where she held a variety of editorial roles. She is based in New York City.
Fact Checked
Many, or all, of the products featured on this page are from our advertising partners who compensate us when you take certain actions on our website or click to take an action on their website. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money.
The devil is in the details for small-business owners seeking funding from the Paycheck Protection Program .
A missing signature can derail your PPP loan application for days or even weeks, delaying desperately needed financial help. And disorganized record-keeping can lead to headaches when you apply for forgiveness and you have to show how each and every dollar of your PPP loan was spent.
Applying the following best practices can help small-business owners get their loan funded and forgiven with relative ease.
PPP has exhausted its funds, but other lenders may be able to assist you. See options with Fundera by NerdWallet.
Get StartedWe’ll start with a brief questionnaire to better understand the unique needs of your business.
Once we uncover your personalized matches, our team will consult you on the process moving forward.
A little legwork can go a long way when applying for a PPP loan. Read up on the program to understand who qualifies and how to apply. Then, pull together all of the necessary paperwork.
At a minimum, you’ll need payroll documents and tax statements. Bank statements, receipts, purchase orders and canceled checks may also be required. Keep everything together so you can easily access it at your lender's request.
"Most people learn the hard way that an ounce of preparation is worth hours on the back end," says Edward Barry, CEO of Capital Bank N.A. in Maryland. "Understand what you need and get it well organized."
Advertisement
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet ratingNerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet ratingNerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
Min. credit score
Min. credit score
Min. credit score
A missing signature can delay your application days or even weeks. So triple check that every statement and document is signed before submitting your paperwork.
"We see it all the time," Barry says. "People forget to sign something and it sets them back to the beginning. They essentially lose their place in line."
Commingling business and personal expenses generally isn't a good practice. And it can really muddy the water when you apply for a PPP loan, says Ken Alozie, managing director of Greenwood Financial Advisors in Washington, D.C.
A bank statement from an established small-business checking account can easily show that your company was in operation on Feb. 15, 2020, which you need to show to qualify for a PPP loan. If your business runs through your personal checking account, it’s harder to prove, Alozie says.
Beyond that, Barry recommends opening a second business checking account specifically for your PPP funds. That way you can easily show how the money was used when it's time to apply for forgiveness.
Your PPP loan essentially becomes a grant, provided you use the proceeds as outlined by the Small Business Administration. That means using the bulk of your funds (at least 60%) on payroll costs, such as salaries, hourly wages, paid sick leave and group insurance benefits.
The other 40% of your loan can now be used on a broader range of expenses, including operating expenses, health and safety modifications and certain supplier costs.
Failure to meet the SBA’s loan forgiveness requirements means that you could have to repay a portion of your loan.
You don’t want to spam lenders with loan applications, but you do want to have a Plan B and Plan C in case a lender rejects your application.
Alozie recommends working with a lender you know. If that’s not an option, look for lenders accepting PPP applications from new clients (many banks prioritized existing customers in past rounds).
Accepting multiple PPP loans will land you in hot water fast, so withdraw any applications with other lenders as soon as you're approved for a PPP loan.
Completing your PPP loan application can be a heavy lift, especially for businesses that have a few dozen employees. Lean on your accountant or bookkeeper, if you have one, to pull the reports needed to apply.
You can also contact your local Small Business Development Center or SCORE, a nonprofit that coaches business owners.
"You definitely want to find a partner who is knowledgeable and can help you navigate the process," says Alozie, who is a certified mentor with SCORE.
You want more than a transactional relationship with your bank. You want a contact who knows you and your business. Then, when you need help (like when you’re applying for a PPP loan) you’re not just a faceless request.
"Part of what you want to do as a small-business owner is build relationships with people you’ll need before you need them," Alozie says.
About the authorYou’re following Kelsey Sheehy
Visit your My NerdWallet Settings page to see all the writers you're following.
Kelsey Sheehy is a senior writer and NerdWallet authority on small business. She has appeared on the "Today" show and NBC News, and her work has been featured in The New York Times, The Washington Post, Nasdaq and MarketWatch, among other publications. See full bio.
On a similar note.
Best Small-Business Loans How to Apply for and Get a Business Loan in 6 Steps Small-Business Grants: Where to Find Free Funding SBA Loan Overview: Types, Pros and Cons, How to Apply MORE LIKE THIS Small-Business Loans Small BusinessAlthough some lenders offer business loans for startups, you may need alternative solutions to finance a new business.
Federal and state agencies, as well as private companies, offer small-business grants. Here's a list of resources.
NerdWallet Home Page Finance Smarter Credit Cards Financial Planning Financial News Small BusinessDownload the app
Disclaimer: NerdWallet strives to keep its information accurate and up to date. This information may be different than what you see when you visit a financial institution, service provider or specific product’s site. All financial products, shopping products and services are presented without warranty. When evaluating offers, please review the financial institution’s Terms and Conditions. Pre-qualified offers are not binding. If you find discrepancies with your credit score or information from your credit report, please contact TransUnion® directly.
NerdUp by NerdWallet credit card: NerdWallet is not a bank. Bank services provided by Evolve Bank & Trust, member FDIC. The NerdUp by NerdWallet Credit Card is issued by Evolve Bank & Trust pursuant to a license from MasterCard International Inc.
Impact on your credit may vary, as credit scores are independently determined by credit bureaus based on a number of factors including the financial decisions you make with other financial services organizations.
NerdWallet Compare, Inc. NMLS ID# 1617539
California: California Finance Lender loans arranged pursuant to Department of Financial Protection and Innovation Finance Lenders License #60DBO-74812
Insurance Services offered through NerdWallet Insurance Services, Inc. (CA resident license no.OK92033) Insurance Licenses
NerdWallet™ | 55 Hawthorne St. - 10th Floor, San Francisco, CA 94105
